Helport AI Limited (NASDAQ:HPAI) insiders, who hold 79% of the firm would be disappointed by the recent pullback

Key Insights

• Helport AI's significant insider ownership suggests inherent interests in company's expansion
• 52% of the company is held by a single shareholder (Fan Yu)
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Our free stock report includes 2 warning signs investors should be aware of before investing in Helport AI. Read for free now.

Every investor in Helport AI Limited (NASDAQ:HPAI) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 79% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 17% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Helport AI.

Check out our latest analysis for Helport AI

What Does The Lack Of Institutional Ownership Tell Us About Helport AI?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Helport AI's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Helport AI is not owned by hedge funds. Fan Yu is currently the largest shareholder, with 52% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. In comparison, the second and third largest shareholders hold about 8.0% and 6.8% of the stock.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Helport AI

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the Helport AI Limited stock. This gives them a lot of power. That means they own US$161m worth of shares in the US$204m company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Helport AI. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 3.4%, of the Helport AI stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Helport AI (at least 1 which can't be ignored) , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.